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US Market Recap: Tariff Shifts Bolster Risk Sentiment
US equity markets rallied on Monday, March 24, as investors responded to President Trump’s latest tariff comments. By suggesting sector-specific tariffs and exemptions for selected countries, he alleviated concerns over broader economic fallout.
The Nasdaq Composite Index soared 2.27%, while the Dow and the S&P 500 gained 1.42% and 1.76%, respectively.
Stronger-than-expected US economic data contributed to the positive start to the week. The S&P Global Services PMI increased from 51.0 in February to 53.2 in March. Contributing about 80% to US GDP, the pickup in services sector activity eased fears of a recession, boosting risk sentiment.
US Consumer Confidence in the Spotlight
Markets now turn to the March CB Consumer Confidence Index. Economists forecast a decline from 98.3 in February to 94.0 in March. A reading below 90 could revive recession fears and strengthen expectations of multiple 2025 Fed rate cuts.
Waning consumer confidence would likely curb consumer spending, which accounts for over 60% of US GDP. While lower spending could dampen demand-driven inflation, recession fears could overshadow the effects of a more dovish Fed rate path on markets.
Conversely, an upswing in consumer confidence could signal economic resilience, potentially reducing Fed rate cut bets. In this scenario, the DAX could also face increased selling pressure.
Other stats include housing sector numbers. However, these will likely play second fiddle to the consumer confidence data.
Beyond economic data, traders should continue monitoring evolving tariff developments, which continue influencing global risk sentiment.
Near-Term Outlook
The DAX’s trajectory will hinge on central bank policies, economic data, and tariff developments:
- Bearish Scenario: Rising US-EU trade tensions, weaker economic data, and hawkish central bank rhetoric could push the DAX toward 22,500.
- Bullish Scenario: Dovish central bank chatter, easing trade tensions, and upbeat economic data could drive the DAX toward its record high of 23,476.
As of Tuesday morning, US futures pointed to a choppy US session, with the Nasdaq 100 mini down 35 points.
DAX Technical Indicators
Daily Chart
Despite a three-day losing streak, the DAX remains well above the 50-day and 200-day Exponential Moving Averages (EMAs), signaling strong bullish momentum. However, economic data and tariff-driven volatility raise short-term downside risks.
If the DAX breaks out above 23,000, the bulls could target the record high of 23,476. A move to 23,476 may bring 23,750 into sight.
Conversely, a DAX fall to 22,750 could signal a drop toward 22,500. A break below 22,500 would bring the 50-day EMA into play.
The 14-day Relative Strength Index (RSI) at 53.71 suggests the DAX could return to the March 6 record high of 23,476 before entering overbought territory (RSI > 70).
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